Cuscaden Peak’s SPH bid gets Australia regulators’ nod, marking final hurdle before shareholder votes

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Cuscaden Peak’s SPH bid has received approval from the Foreign Investment Review Board in Australia (FIRB), marking the final regulatory hurdle for the eleventh-hour counter-offer to Keppel Corp.’s tender for SPH.

The FIRB approval followed regulatory approvals from the Monetary Authority of Singapore (MAS) and the Info-Communications Media Development Authority (IMDA) in Singapore in November, Cuscaden Peak said in a statement filed to SGX.

“With no approval from Cuscaden’s shareholders required, success of the Cuscaden scheme is now in the hands of SPH shareholders,” the consortium said in the statement. “The Cuscaden scheme now delivers higher transaction certainty compared to the Keppel scheme, which still requires shareholder approval from Keppel’s shareholders.”

Cuscaden Peak added that it has agreed to waive its right to walk away from the deal in the event of a material adverse effect.

“Our decision to waive the MAE provision also demonstrates our strong commitment to working with SPH to bring the Cuscaden Scheme
for the SPH shareholders to vote on as soon as we are allowed to,” Christopher Lim, the group executive director of Hotel Properties and the spokesperson for Cuscaden, said in the statement.

Keppel’s CEO Loh Chin Hua had called his company’s decision to waive the material adverse effects (MAE) clause “a deliberate decision on Keppel’s part to improve the attractiveness of Keppel’s offer.” That was according to a transcript of his opening remarks at a 30 November briefing organised by the Securities Investors Association (Singapore) (SIAS).

SPH’s independent directors have preliminarily recommended shareholders accept Cuscaden’s bid, calling it “superior,” to Keppel’s, but SPH’s shareholders must first reject Keppel’s bid at an upcoming meeting.

Cuscaden’s apparent winning bid — which values SPH at S$3.9 billion — will give shareholders the choice of either S$2.40 a share, including S$1.602 in cash and 0.782 SPH REIT unit valued at S$0.798 each, or an all-cash offer of S$2.36.

Previously, Keppel Corp. had sweetened its bid to acquire SPH to S$2.351 a share, in a cash-and-share offer, topping its previous bid of S$2.099 and a competing bid of S$2.10 in cash from Cuscaden Peak.

Keppel’s second offer had increased the cash component by S$0.20 a share, to S$0.868, as well as including 0.596 Keppel REIT unit and 0.782 SPH REIT unit.

Who is Cuscaden Peak?

The consortium bidding against Keppel, called Cuscaden Peak, includes Tiga Stars, a wholly owned subsidiary of tycoon Ong Beng Seng’s Hotel Properties, and Adenium, which is a wholly owned subsidiary of Temasek portfolio company CLA Real Estate Holdings, as well as Mapletree Investments‘ indirect wholly owned subsidiary Mapletree Fortress. Mapletree Investments is wholly owned by Singapore state-owned investment company Temasek.

Cuscaden Peak is 40 percent owned by Tiga Stars, 30 percent by Adenium and 30 percent by Mapletree Fortress. Tiga Stars is 70 percent owned by Hotel Properties, with the remainder held by Como Holdings, which is ultimately owned by Ong Beng Seng, who is the controlling shareholder of Singapore-listed Hotel Properties. Adenium is wholly owned by CLA Real Estate Holdings, which is an independently managed portfolio company of Temasek.